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Sold a house in 2017, but spent money to get the house ready in 2016. Can I deduct the expenses incurred in 2016?

Expenses include home improvements, inspections, repairs, and moving expenses.
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1 Reply
DianeW
Expert Alumni

Sold a house in 2017, but spent money to get the house ready in 2016. Can I deduct the expenses incurred in 2016?

No, there is no deduction in 2016 with the exception of mortgage interest and real estate property taxes.  However, the improvements are added to the cost basis of the house to reduce the overall gain on the sale in 2017.

Also add the following expenses at purchase and sale that will further reduce gain.

  1. Title search fees, 
  2. Recording fees
  3. Transfer taxes 
  4. Application fees
  5. Credit report fees
  6. Appraisal fees (if required by the lender)

The IRS system is pay as you go, so you can use the link to determine the amount of estimated tax that is due (to eliminate interest for late payment).

  • 1040ES Instructions
  • OR:
  • Search for estimated tax payments for next year (upper right), Jump to estimated tax payments for next year > follow the prompts to prepare estimated tax payment vouchers for 2017
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